Promoters of India’s first private reinsurer sell off to Go Digit Infoworks

Chennai, June 28 (IANS) Just short of a year after threatening to surrender their licence, the promoters of India’s first private reinsurer ITI Reinsurance Ltd have announced the sale of their holding in it to Go Digit Infoworks Services Private Ltd, backed by the Canada-based Prem Watsa promoted Fairfax group.

In a regulatory filing in BSE on late Tuesday, The Investment Trust of India Ltd said it has entered into a share purchase agreement with ITI Reinsurance Ltd, Lakshdeep Investments and Finance Private Ltd, Suraksha Realty Ltd and Go Digit Infoworks Services for transfer of all equity shares of ITI Reinsurance Ltd to Go Digit Infoworks Services.

As per the agreement signed on June 26, The Investment Trust of India will also transfer 21,74,40,000 equity shares of Rs 10 each in ITI Reinsurance to Go Digit Infoworks Service.

As to the sale price, The Investment Trust of India said: “Subject to the terms of the share purchase agreement, the total consideration for sale of all shares will be an amount equal to the net asset value (as determined in accordance with the terms of the share purchase agreement) plus a premium of Rs 131,039,882.

“The pro-rata amount of such consideration (i.e. proportionate to the shares of ITI Reinsurance Limited transferred by the Company i.e. 80 per cent) shall be paid by Go Digit Infoworks Services,” it added.

Asked to comment, The Investment Trust of India promoter Sudhir Valia told IANS: “I will speak to you when I am free.”

Last July, Valia told IANS that they are willing to surrender the reinsurance licence finding the regulations on reinsurance – an insurance for primary insurers or those who sell policies to the public – “illogical” and an uneven playing field for a whopping investment of Rs 500 crore.

“The exit of promoters of ITI Reinsurance does not send out any negative signal but reinforces the fact that reinsurance is really long term business,” an reinsurance industry expert, who did not want to be named, told IANS preferring anonymity.